Rackspace Technology, Inc. Class Action Lawsuit - RXT

Company: Rackspace Technology, Inc.

Ticker: (NASDAQ) RXT

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Lead Plaintiff Deadline: September 28, 2026

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Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

1. I have reviewed a complaint filed in the action.

2. I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.

3. I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.

4. My transaction(s) in Rackspace Technology, Inc. which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.

5. Within the last 3 years,

I have not sought to serve nor have I served as a class representative in any federal securities fraud case.
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6. I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

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Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against Rackspace Technology, Inc. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

I have reviewed the complaint linked in paragraph 1

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Class Period

Begins

May 2026

Ends

Jul 2026

May 07, 2026 - July 08, 2026

Allegations

The filed complaint alleges that Rackspace Technology, Inc. made materially false and/or misleading statements and/or failed to disclose that: (1) the Company’s enterprise AI efforts would require Rackspace to significantly re-prioritize its capacity and capital away from the profitable Private Cloud segment; (2) that Rackspace’s public cloud revenue was declining as customers contracted directly with hyperscale cloud platforms; (3) that, as a result, Rackspace was likely to significantly reduce a material portion of its public cloud infrastructure resale business; (4) as a result, the Company’s fiscal year 2026 revenue would be significantly impacted; and (5) that, as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

Eligibility

In order to be eligible to join the RXT class action lawsuit, you must have incurred a loss on shares of Rackspace Technology, Inc. purchased during the class period listed above.

Lead Plaintiff Deadline

If you suffered a loss in Rackspace Technology, Inc. during the relevant time frame, you have until September 28, 2026 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.

Rackspace Technology, Inc.Class Action Lawsuit Details

Key Facts About Rackspace Technology, Inc. (NASDAQ: RXT)

● The Allegation: The complaint alleges Rackspace overstated the growth impact of its AMD enterprise AI partnership while failing to disclose that the AI pivot would require capacity and capital to be shifted away from its profitable Private Cloud segment.

● The Stock Drop: RXT fell $2.21, or 33.6%, to close at $4.37 per share on July 9, 2026, after Rackspace cut full year 2026 revenue guidance by $150 million and reduced its Private Cloud revenue outlook by $25 million.

● Class Period & Defendants: The class period runs from May 7, 2026 through July 8, 2026, inclusive. Defendants are Rackspace Technology, Inc., Gajen Kandiah (Chief Executive Officer at all relevant times), and Mark Marino (Chief Financial Officer at all relevant times).

● Lead Plaintiff Deadline: September 28, 2026. Class membership requires no action before that date, and the matter is contingency-based with no out-of-pocket cost.

Rackspace Technology Class Action Summary


Company	Rackspace Technology, Inc. (NASDAQ: RXT)
Lead Plaintiff Deadline	September 28, 2026
Class Period	May 7, 2026 - July 8, 2026
Stock Drop	July 9, 2026 - RXT fell $2.21 (33.6%) to $4.37

Introduction

A securities class action lawsuit has been filed against Rackspace Technology, Inc. The lawsuit covers investors who purchased Rackspace securities from May 7, 2026 through July 8, 2026.

The complaint alleges defendants made materially false and misleading statements about Rackspace's AI strategy and revenue outlook. It says the company did not reveal that its AI push would strain resources and reduce near-term guidance.

After Rackspace announced updated financial guidance on July 9, 2026, RXT fell sharply. The stock dropped $2.21, or 33.6%, to close at $4.37 per share.

Company Profile

Rackspace Technology, Inc. is a hybrid cloud and AI solutions company that owns and operates physical infrastructure to host cloud services and artificial intelligence. Its business includes Private Cloud, Public Cloud, and Rackspace AI services intended to help organizations scale AI adoption.

Class Period

May 7, 2026-July 8, 2026

Investors who purchased or acquired Rackspace Technology, Inc. (RXT) securities during the Class Period may be entitled to seek recovery under the federal securities laws.

Allegations

The Rackspace Technology shareholder lawsuit centers on statements the company made after announcing a memorandum of understanding with Advanced Micro Devices, Inc. on May 7, 2026. Rackspace said the AMD collaboration would help establish a new category of governed enterprise AI infrastructure and create an Enterprise AI Cloud for regulated enterprises and sovereign workloads.

On the same day, Rackspace reported first quarter 2026 results and issued full year guidance, including Public Cloud revenue of $1.575 billion to $1.625 billion. During the earnings call, Chief Executive Officer Gajen Kandiah stated that the AMD partnership fit into Rackspace's technology stack and gave the company confidence in its full year Private Cloud growth profile. Chief Financial Officer Mark Marino also stated that Rackspace was reaffirming its full year 2026 guidance in its entirety.

The complaint further cites Rackspace's May 8, 2026 Form 10-Q, which discussed the company's business mix shift between Private Cloud and Public Cloud. Rackspace stated that Private Cloud delivered higher segment operating margins but required more capital expenditures, while Public Cloud had lower margins but required less capital expenditure. According to plaintiffs, these statements were misleading because they did not disclose the magnitude of the resource shift required by Rackspace's AI strategy.

Rackspace also announced a definitive AMD agreement on June 16, 2026 and filed a Form 8-K describing a workforce realignment plan. The company said the plan would terminate approximately 15% of its global workforce and redeploy resources toward enterprise AI. Plaintiffs allege defendants failed to disclose that Rackspace's Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms, that Rackspace was likely to reduce a material portion of its Public Cloud infrastructure resale business, and that fiscal year 2026 revenue would be significantly impacted. As a result, the complaint alleges defendants' positive statements lacked a reasonable basis.

The Truth Emerges

Rackspace disclosed the alleged truth before the market opened on July 9, 2026, when it published second quarter 2026 financial results and a strategic and financial update on its transition to becoming the operator of the full enterprise AI stack. The company revealed that enterprise AI investments required a significant re-prioritization of resources and reduced full year 2026 revenue guidance by $150 million.

The July 9 update also lowered Rackspace's Private Cloud outlook by $25 million and Public Cloud outlook by $125 million. Rackspace attributed the Public Cloud reduction to exiting low-margin resale as hyperscalers continued moving customers to direct contracts. The company also stated that lower near-term margins reflected upfront growth investment and restructuring before AI revenue ramped.

During the same day's conference call, Kandiah said Rackspace was reducing its fiscal 2026 revenue outlook to account for the transition away from low-margin engagements that would be redeployed to enterprise AI over the next 2.5 years. Marino stated that the $25 million Private Cloud reduction involved colocation and basic hosting revenue, and that Rackspace would redeploy that capacity and capital toward higher-yielding AI deployments.

Market Reaction

Following the July 9, 2026 disclosures, Rackspace's stock price fell $2.21, or 33.6%, to close at $4.37 per share on unusually heavy trading volume. The complaint alleges this decline reflected the market's reaction to the reduced guidance and the revelation that Rackspace's AI transition would require a larger near-term revenue and margin tradeoff than investors had been led to expect.

The Rackspace Technology securities lawsuit also alleges that the company's shares had traded at artificially inflated prices during the Class Period. According to the complaint, RXT closed at a Class Period high of $7.53 per share on June 17, 2026, before the guidance cut and related disclosures.

Next Steps

● Lead Plaintiff Deadline: September 28, 2026

● After the lead plaintiff deadline, the Court will consider any lead plaintiff motions.

● Defendants may file a motion to dismiss.

● If the case proceeds, the Court may later consider class certification.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.